Friday, November 7, 2014: 1:30 PM-3:00 PM
Cochiti (Convention Center)
*Names in bold indicate Presenter
Panel Organizers: Michal Grinstein-Weiss, Washington University in St. Louis
Discussants: Ray Boshara, Federal Reserve Bank of St. Louis
Recent events show that many households on the path to mobility were not armed with sufficient resources to weather the financial storm of the Great Recession. A massive loss of wealth among households that seemed upwardly mobile begs the question: What does it take for low-income households to successfully navigate the path to financial stability and mobility? This panel takes a new, critical look into the financial lives of low-income households and considers the antipoverty policies influencing daily economic behavior. Using a variety of rigorous methods, the papers presented in this panel draw upon data from in-depth qualitative interviews, randomized controlled trials, longitudinal surveys, and national data sets.
The first paper uses in-depth qualitative interviews with Earned Income Tax Credit (EITC) recipients to investigate upward mobility among low-income working parents. The authors uncover four explanations for the apparent disjuncture between EITC recipients’ interest in upward mobility and failure to use the large tax refund on human capital investments—specifically, investments via educational spending.
The second paper presents analyses from one of the largest data sets detailing the financial lives and behaviors of low-income households. The data set includes data from an experiment in TurboTax and from two waves of the Household Financial Survey, a large-scale longitudinal survey. The authors share findings on household financial volatility and tax-time contingency savings decisions. They also explore the policy implications of these findings.
The third paper uses data from the Survey of Consumer Finances to examine liquid wealth and consumer debt among two cohorts of vulnerable older Americans. The data show patterns of rising consumer debt and declining liquid wealth relative to income or assets. Examining policy changes that may have contributed to these trends, the authors discuss policies with potential to strengthen the balance sheets of vulnerable populations.
Together, the papers offer a panel rich in insights from new sources of rigorously collected data as well as from analysis on low-income households and their financial behavior. The presenting authors and discussant will critically examine the effects of antipoverty policy on households. Topics will include the EITC, asset limits for means-tested public benefits, and incentives for building small-dollar liquid savings. The conference audience will leave this panel with actionable steps for increasing financial stability and mobility among low-income households.